5 Common Real Estate Scams in South Florida and How to Avoid Them

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By Gary M. Landau, Esq.

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5 Common Real Estate Scams in South Florida and How to Avoid Them | Call (954) 979-6566

Florida has a reputation for having a large amount of fraud perpetrated on its citizens, and real estate has proven to be no exception. Con artists prey on people by using trickery and lies, and some of these criminals are so sophisticated even the most savvy homeowners can be taken.

As an experienced real estate attorney, our practice sees too many people losing their home, or  having to scramble while working with the police to save it. Knowing some of the most common homeowner frauds that are out there can help you protect yourself from humanity’s worst.

1. Loan Payoff Wire Fraud

This is a huge scam that is increasingly sweeping up home sellers and the buyers of their homes.

Here’s how it works: A scammer hacks into the email account of one of the parties to the sale–often the Realtor. Then they sit back quietly and watch the details of the transaction as it transpires. At the crucial juncture when the sale is about to be completed, they send their own email pretending to be the seller or the seller’s bank. This email includes their own wiring instructions in the hopes that the money from the sale will be diverted to them. Once the transaction is complete, the money erroneously sent to them is quickly transferred to an offshore account or a crypto wallet, never to be seen again.

Unfortunately these criminals have been successful on many occasions, leaving sellers without their profits or their mortgage paid off, and buyers in limbo about the ownership of the home. Some of these fraudsters are so sophisticated they have set up fake websites for their “bank,” duping the closing agent into thinking they’re sending money to a real institution.

The most important way to protect yourself is to always speak by phone to our office or another closing agent to verify your wiring instructions before a closing occurs.

2. Fake Listings

The COVID-19 pandemic and the subsequent rise in remote work have opened the door for scammers to fake real estate transactions from start to finish.

It begins with a fake listing at a price that seems too good to be true. In reality, the house displayed in the listing–photos and all–is not owned by the person claiming to be selling it. Once a buyer puts in an offer, the scammers impersonate mortgage and title agents and take the unsuspecting victim through every step of a seemingly legitimate real estate transaction. Of course, after the money is wired (often offshore) the buyer learns that someone else already legally owns the home.

Spotting a fake listing can be difficult. But the old adage if something is too good to be true it probably is accurate for homeownership too. If you have a question about the authenticity of ownership, a real estate lawyer can look through title records to see who actually owns a given property. This is also a reason to work with a reputable Realtor when seeking a new home.

3. Loan Refinancing Scams

This category of scams differs from the prior two because the service provided is not actually fake. But those involved are referred to as “predatory lenders” for good reason. Their primary targets are elderly homeowners or individuals who suffer from cognitive impairment.

These people contact homeowners and convince them to refinance their loans, while charging exorbitant fees and points for the transaction. The homeowner may have had a great 2.5% 30-year-loan, but after the refinance they end up with a rate of 10% or more, with monthly payments beyond what the person can afford. Sometimes the homeowner is also encouraged to take cash out of their home, leaving unsuspecting future heirs with no knowledge that the equity is being drained.

Refinancing a home loan can make sense in certain situations, but with interest rates rising most people’s original loans are better than anything they can get today. No one should refinance based on a sales phone call. If you do want to refinance your mortgage, talk to lenders at reputable banks or other institutions so you can avoid predatory lenders.

Remember, too, that you can choose to have your real estate lawyer handle your refinancing closing. This involves much of the same paperwork as a home sale. By using an independent attorney rather than the closing agent the mortgage broker recommends, your interests would be better protected.

4. Foreclosure Relief

When a homeowner has fallen behind on mortgage payments and is facing the prospect of foreclosure, desperation can increase their risk of being scammed. This is why criminals sometimes search the public records to identify homes in preforeclosure whose owners they may be able to target.

Once such a target is identified, the con artist presents themselves as foreclosure experts, claiming they can help the owner negotiate on their behalf to regain their financial footing and keep their home Of course, their services are offered for a hefty, upfront fee, generally hundreds or thousands of dollars. Once the money is paid, the “expert’s” phone number changes, and they disappear, leaving the homeowner with the same foreclosure risk but now with fewer funds to start over somewhere else.

There are reputable credit agencies that may help you repair your bad credit. But this is a long-term prospect so you can better manage your money, not a quick fix when you’re about to enter foreclosure. In that situation, you can try to negotiate with your lender to forestall the foreclosure, but in our experience this is not often successful.

5. Scams on a Homeowner’s Heirs

This new trend among scammers recently led to two women being arrested and charged with an array of felonies in South Florida because they allegedly defrauded unsuspecting homeowners out of more than a half million dollars.

These scams begin when the criminal searches for homes with unpaid property taxes, which can be an indicator that a homeowner might have recently passed away. Local obituaries also often help identify potential targets.

Once a property is in the scammer’s crosshairs, they generally employ one of two tactics. Either they contact the rightful heir and convince them to sign over the deed to the house, often citing dire structural conditions and costly repairs they can save them from. If this isn’t successful or if no heir is identified, someone with an identical last name is enticed to step in and pretend to be the heir. After title to the home is transferred to the con artist, it is sold for a profit, which they–not the legitimate heir who hasn’t yet started a probate–will pocket.

When a loved one passes away, it is important for the rightful heirs to immediately speak with an attorney specializing in probate law. Our firm or other probate expert can advise what steps need to be taken–including keeping all payments on a house up to date.

Don’t waste time searching “Probate lawyer near me,” or “Real estate lawyer near me.” The Law Office of Gary M. Landau, P.A. has decades of experiencing serving probate and real estate clients in Broward and Palm Beach County.

With more than 25 years of experience and countless satisfied clients, Gary M. Landau and his team are uniquely positioned to help you with your probate and real estate needs in South Florida. Whether you’re ready to probate a loved one’s estate or to write your own will, or if you are purchasing a home, have inherited a home, or want a closing agent to handle title insurance and all documents for your closing or refinancing, the LAW OFFICE OF GARY M. LANDAU, P.A. is ready to work with you.

Call our office at (954) 979-6566 or complete our online form today to schedule a free consultation. We work with our clients in person, over the phone, or on Zoom.

Copyright © 2022. LAW OFFICE OF GARY M. LANDAU, P.A. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction.

LAW OFFICE OF GARY M. LANDAU, P.A.
7401 Wiles Road, Suite 204
Coral Springs, FL 33067
(954) 979-6566
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Frequently Asked Questions

A will is the simplest way to ensure that your funds, property and personal things will be distributed after your death the way you want them to. Even if you have very few assets, you will benefit from having a will. About half of all Americans die without a will (known in legal terminology as dying intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to state law. A will ensures that your assets will be given to family members or other beneficiaries you designate.

 

Having a will is doubly important if you have young children. One section of the will allows you to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children, who may not be the person you desire.

Many Florida residents have out-of-state wills, drawn up while they were still living among the hills of North Carolina or the hubbub of New York. If the will was valid according to your old state’s laws at the time you made it, it is still legal in Florida. However, if you are a Florida resident, you may benefit greatly by having a new will drawn up in Florida, because it will likely be more easily admitted to probate.

 

It is important to know that each state has its own requirements for what makes a will a legally binding document. For example, Florida doesn’t recognize handwritten wills that haven’t been witnessed (known as “holographic wills”), or oral wills not put into writing, even if other states okay them. There’s also the matter of Florida estate law. In this state, for example, your surviving spouse is entitled to 30 percent of your net probate estate, regardless of what you say in your will. The spouse may also have a “Homestead” interest in property you share here, even if you want your house to go to someone else. In fact, all real property owned in Florida will be subject to this state’s laws, even if you’re a snowbird maintaining a residence in the state where your will was drawn up. Other peculiarities also exist, which is why a Florida will could make things much easier for your heirs.

 

If you would like to have me review your current out-of-state will, I am happy to do so without charge. If it turns out to be in accordance with Florida state laws and procedures, you can continue to rely on it. If not, however, your heirs would rather you discover that now.

It is a good idea to re-read your will every few years to be sure it reflects up-to-date realities (you may not want to leave your heirloom to a niece you are no longer speaking to, nor have someone be named your child’s guardian if they have taken seriously ill since you drafted your will). It is especially important to reexamine your will if:

 

  • You have gotten married since it was last drafted;
  • You have made bequests to people who have fallen out of your favor or are no longer living (I recently updated the will of a man who had left everything to his first wife, who was long deceased), or you have not included people who are now dear to you;
  • You would like to change the person named as the personal representative of the estate. (Note: Florida law does not allow a nonresident of the state to serve in this position, unless it is an immediate family member or certain other relatives);
  • You have acquired pricey or sentimental items that are not accounted for in your will. Do note, though, that Florida law allows you to attach a separate personal property memorandum to your will, detailing who will get which specific items. This list can be changed whenever you want.

Perhaps I should answer this question with where not to store it: in a bank’s safety deposit box. Although it may seem logical to put this with your other important papers, it is often difficult for your heirs to gain access to the box once you die, since the box is sealed then and must be opened in the presence of a bank employee.

 

One good option is to leave your original will with the attorney who drafted it, making copies for your personal representative and other important relatives and letting them know who has the original. For my clients who prefer that I store their original will, I keep it in a fireproof will vault in my office, or in the vault in my bank.

 

As an alternative, you could store the will in a fireproof box or vault in your own home.

 

Wherever you store it, be sure to let your personal representative and other close relatives know where you have put it!

Probate is when the court oversees your assets and liabilities after your death. During probate, the court makes sure that your will is valid and acceptable; that all debts, bills, creditor’s claims, and taxes are paid from your estate’s assets; and that your remaining assets are distributed to your beneficiaries according to your will (or, if no will exists, by Florida law).

 

Probate usually does take longer than most beneficiaries would like. But in order to ensure that everyone with a right to a claim is included in the process, the court requires several steps. If the size and complexity of your estate are minimal, however, the entire process of probate can take as little as a few months. Larger estates that are subject to IRS estate taxes or those involving litigation on the part of creditors or heirs generally take longer, often one or more years.

 

To speed the process along for simple and small estates, the courts allow a shortened form of probate, known as “summary administration,” which requires much less paperwork and time.

A personal representative (PR) is a friend or relative, or an attorney or bank, who is put in charge of the estate until all matters regarding the probate are resolved. (In other states, this person is sometimes called an executor or administrator.) The job of the PR includes identifying all assets, searching for creditors and paying valid claims, filing required estate tax returns if the estate is large enough (the figure escalates over time, according to Congressional laws), coordinating with the probate court and attorneys, and overseeing the distribution of assets–all done under the guidance and assistance of a qualified attorney.

 

Serving as a PR is an important role, and such a person should be selected with care as to who is most willing and best able to serve in this position. By Florida law, your personal representative must be over 18 years of age, and be a blood relative, your spouse, the parent or child of your spouse, or a Florida resident.

Generally, no. If you co-own all property via such legal structures as “tenancy by the entirety” or by “joint tenancy with right of survivorship” the property immediately passed to you upon your spouse’s death. Proof of death is usually all that is needed to pass such jointly owned title for cars, stocks, and other personal property to the surviving spouse.

 

But if even one asset was held solely in the deceased person’s name, or any property is owned in the form of a “tenancy in common,” that estate will be required to go through probate. If the assets are limited, the shorter, simpler form of probate is generally all that is required.
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